Index plunges on weak PLDT performance

MANILA, Philippines - The Philippine Stock Exchange index (PSEi) plunged by more than 100 points yesterday due largely to index heavyweight Philippine Long Distance Telephone Co.’s disappointing performance last year and lower than expected core earnings guidance for 2016, analysts said.

The PSEi  declined by a sharp 100.26 points, or 1.48 percent, to settle at 6,671.04, while the broader All Shares index likewise finished lower by 29.38 points, or 0.75 percent, to settle at 3,876.38.

 Most counters closed in negative territory except for two, the industrial and property indexes, which gained 18.58 and 49.48 points, respectively.

The rest of the counters such as the financials, holding firms, services and mining and oil all closed in negative territory with the Services counter posting the biggest drag or a decline of 128.26 points.

Total value turnover stood at P8.49 billion. Advancers edged out decliners, 90 to 88 while 46 stocks were left unchanged.

PLDT reported yesterday that its full year 2015 core earnings ended at P35.2 billion, 5.9 percent lower year-on-year although in line with the company’s own guidance of P35 billion.

However, analysts said the telecoms giant gave lower than expected 2016 profit guidance.

“PLDT provided disappointing guidance for its performance in 2016. According to PLDT, it expects core earnings to drop 20 percent to P28 billion. Earnings guidance for 2016 is also around 14 percent below our forecast of P32.5 billion,” COL Financial Philippines said in a market commentary yesterday.  

As a result, PLDT expects a single-digit revenue growth for 2016 and a continued decline in EBITDA as legacy businesses such as international and national long distance and SMS revenues are replaced with data,” COL Financial Philippines said in a market commentary yesterday.